Note: The following essay was written at the time of the 2008-10 financial crisis and first updated in 2021.
In April 2011, like most Americans, I filed my federal tax form. Unlike most Americans, I did so gladly, with no more than a tiny hint of resentment. As in most years, I felt mostly embarrassment, because of the minuscule amount that had been paid in income tax.
Were these low taxes due to clever manipulation of the tax-form provisions? Hardly. Like all self-employed persons, I deduct ordinary business expenses. But then, on the individual 1040 return, I use the standard deduction that's available to everyone who chooses not to itemize. Yet, my bottom line typically shows only a comparatively tiny amount of tax due for the year.
Granted, part of the reason for my own low taxes in the past few years is the substantial drop in income that occurred, as a result of the frazzled economy. Obviously, that s not the most pleasurable way to keep your taxes down.
Even when personal income levels were higher, though, the amount I paid in federal income tax was nearly always ridiculously low. Only rarely, in fact, has the income tax amount exceeded, or even approached, the total paid for Social Security tax. Self-employed people pay both the employer and the worker's share of the Social Security tax, which has stood for many years at 15.3 percent. Only in a few very good years, financially, has my income-tax figure surpassed that percentage.
While arguments can be made about the equity and amount of state and local taxes, whining about federal taxes, like the Tea Party folks and their successors, is simply absurd. Despite incessant groans and gripes about being overtaxed, Americans are grossly undertaxed.
Income tax rates in the early 2010s reached their lowest level since the early 1950s. In fact, according to government statistics, the total average tax owed by Americans hadn't been so low since 1958. Making this modest degree of taxation sound like an avaricious grab by the government in general, and the Obama Administration in particular, reached beyond ludicrous and into lunacy.
Sure, some European countries, such as Sweden and Denmark, assess higher income tax rates on their residents. To compensate, those nations also provide a social safety net that makes the American version look puny and full of gaping holes.
Wealthy businessman Ross Perot made plenty of questionable remarks during his third-party run for the Presidency in 1992, but one of his comments on taxation stood out as plain common sense. Perot admitted that he was delighted to pay big taxes. Why? Because they demonstrated that he d enjoyed a big income. Perot may have been somewhat disingenuous at the time, as later reports indicated that his own tax-rate percentage was quite modest.
Not all taxation is laudable or admirable, of course. The American tax code remains riddled with loopholes and giveaways to specific groups, which tear away at the progressive nature of the income tax.
Furthermore, like nearly everyone else, I object strenuously to many of the ways our tax money is spent, led by the need to finance the 2.5 wars currently in progress. At the same time, I couldn't agree more with the words of the late Supreme Court Justice Oliver Wendell Holmes, Jr., who said "I like to pay taxes. With them I buy civilization."
Well, as a proponent of civilization, I m happy to pay those taxes. Frankly, we all should be.
As economist Paul Krugman once suggested in The New York Times, if the deficit is really as serious an issue as Republicans claim, we should be talking about raising taxes, not lowering them. How could any reasonable person dispute the logic of that argument? Eliminating the Bush tax cuts for the affluent should be just the beginning. But most important, Americans need to quit whining about the laughably low taxes they're paying.
2023 Update: All the basic points in the above essay still apply, with one possible exception. In recent years, I might not claim to pay taxes with barely a hint of resentment. Especially during the disastrous Trump years, with its disregard for democracy and trashing of Constitutional values, I was not pleased to see any amount of revenue go in his direction.
As countless critics have pointed out, the ex-president's gigantic tax cut did benefit the wealthy most of all. Seldom mentioned, though, is the increase in the standard deduction, used by all taxpayers who do not itemize deductions on their tax forms, making millions of low-income Americans free of any income tax due.
For the most part, the tax battle hasn't changed a bit. Democrats see much to be done in the country, and are at least somewhat willing to raise taxes to cover the work that's needed. They also realize the danger of waiting to address those issues, which might add to the national debt. Most Republicans, in total contrast, continue to see virtually any tax increase as something to be fought vigorously. Furthermore, they lament the mere existence of most, if not all, taxes of any sort. Those of us who remain willing, if not exactly eager, to pay our proper amount of taxation continue to feel like outliers in an economic system that intensifies inequality rather than seriously attempts to alleviate it.